Greg Pinelli

Gold and Silver Are Not Proven Inflation Hedges

The notion that there is "no evidence" to support the idea that gold (and silver) don't respond (I assume the author means respond "significantly")
to inflation and deflation reduces a very long chain of historical experiences to trivialities.
If by inflation we mean a general devaluing of the currency then gold obviously..and always..has responded as a safer preference. During times of inflation, the Civil War being the most obvious, people have ALWAYS exchanged paper for gold. Why does the author think Nixon closed the gold window?? Nations were taking cheap dollars and exchanging them for precious gold...
Gold is a current and anticipatory standard..its price both weighs current paper money and credit value AND what might be in several months.
Inflation is ALWAYS a lagging indicator..statistics for it's weighing are always after the fact! The litmus test for all this is..If investors knew inflation was going to be double in 6 months..would they not buy Gold? This is precisely what happened in the late 1970s...investors had NO assurances inflation in the US was being effectively controlled and gold..in anticipation of it getting worse...bid up gold.
If inflation hits us square in the eyes next year from extensive credit creation apparently this ignorant author will be pumping out analyses about golds rising price being due to astronomical considerations! Brilliant.